Japan Lifeline (JLL) is a prominent player in the medical equipment industry, specializing in the arrhythmias, cardiovascular and gastrointestinal fields. Providing comprehensive solutions to medical institutions and patients, the company is at the forefront of innovation in its field.
In just the last 10 years, the number of people in Japan over 65 has grown by more than 3 million people, and now 1 in 4 people are already over the age of 65. With this, there has been a big push to increase the healthy life expectancy here in Japan, which is the number of years one can live disease-free and without disability and we are seeing the rise of robotics, implantable organs, and the adoption of regenerative medicine-based techniques coming onstream. Could you give us your take on advances in medical-based solutions here in Japan?
Our medical operation focuses on the diagnostics and treatment of a disease, so it is not so much into preventative medicine. With the change in society and the advancement of technology, there would be more remote diagnostics and robotics surgery, which reduces human errors in operations. Using AI would even enhance the medical field, and we will continue to concentrate on the treatment and diagnostic devices that support this treatment. In fact, regenerative medicine is one of the fields that we are putting emphasis on. Since we have cell delivery technology using our catheter technology, we are collaborating with a company in that field.
When we interviewed Olympus, we talked at length about these new technologies. While today's surgical practice is one of the longest fields of study in terms of education, many critics say that due to these technologies, new doctors are not trained and cannot keep up with recent developments. This is particularly true when looking at intervention from a surgical perspective. How can we provide guidance and education so that medical practitioners may remain up to date with these ever-changing technological advancements?
It is very important for us to manufacture devices that can be used by average doctors, not only skilled or expert doctors. In the past, a specific doctor was well-known for having the skills, but now, it is becoming more universal where doctors have equal skills for all surgeries. Unlike before, annual testing was needed through training. Now, there are simulations, and we are providing new opportunities for doctors to experience simulation.
The scientific society used to require specific obligations for companies and research institutes to go through before going into a clinical trial. However, since companies like us have the ability to do all simulations within the company, we can smoothly jump into clinical testing.
Hospitals were totally overwhelmed during COVID, and there were simply not enough beds for patients. On the other side of the coin, there were also not enough human resources and doctors, especially in Japan. Could you give us your take on how the medical field can better cope when it comes to reducing this burden on doctors, especially in times of crisis?
The extra burden is put on physicians because of their lesser number compared to many facilities. There are 2,200 facilities for pacemaker implants. Some of those only implant about three to five units, while some implant over 100. For ablation technology, there are around 800 facilities and 1,300 for PCI.
Due to having numerous facilities without enough physicians, the burden is mounted on each physician. It is important for us to provide the equipment that requires less time for the surgery. There has been a reform in the work style of physicians, and it is now very hard for them to work overtime. Doctors prefer to do less time-consuming surgeries. Surgeries done on Saturdays have dwindled as well. There is a trend of cutting down the work hours of medical personnel. They used to handle three cases for ablation surgeries, so they worked until seven or eight o'clock. However, today, they keep it down to two. Doctors, nurses and technicians leave early. During COVID, surgery cases drastically dropped because medical personnel, nurses and doctors got infected with the virus, making the team unable to do the operations. I was expecting the surgeries to resume after the pandemic, but that does not seem to be the case. That is due to the change in work style, and they are keeping their work hours as a priority. I am referring to scheduled operations like ablation, which can be planned a month ahead. In cases of emergencies, it is done 24/7.
In recent times, one of the big trends we have seen in the surgical field is minimally invasive surgeries. Since that means usually much smaller incisions, there is a faster healing time and shortened hospitalization. However, one of its big drawbacks is the cost of MIS equipment and the training required for doctors to use these new tools. What are your thoughts on this field? What solutions is your company developing to promote minimally invasive surgeries?
You have to first remember the quality and safety of surgery, whether that is MIS or a conventional operation. We have to choose the best method of treatment. Although minimally invasive surgeries may be good, we always have to consider the outcome.
Japan is unique because there is no private insurance. Everything is under national healthcare insurance, where regardless of one’s economic status, everyone can receive the same type of medical treatment. It depends on the doctor one goes to, whether he chooses minimal invasive surgery or other methods of surgery.
Overall, the direction is toward minimally invasive surgery, which is not only good for the patient's recovery but also preferred by doctors and nurses as it takes less time. However, we have to think about the budget.
You have been in the medical business for over 40 years, beginning as a trader. In 1999, you expanded to be a manufacturer. One of your first products were PTCA guidewires in 2001. What triggered that transition to becoming a manufacturer?
In 1981, our company was established as a trader of pacemakers and cardiovascular devices that imports for overseas medical companies. However, once we grow the market, the product agreement may be terminated or discontinued. We experienced that risk, so to avoid that, we started our own manufacturing. The majority, about 70%, of the medical devices for diagnostics and therapeutics in Japan are imported. We learned that Japanese doctors needed the right size of catheters for Japanese users. Hence, we have been listening to the voices of the physicians and reflecting that in our product manufacturing. We have been talking to doctors about having Japanese flag products.
In the past, doctors took for granted the use of overseas imported products from Medtronic, Abbott and J&J. Instead of using unnecessary long catheters, they could make the appropriate size for Japanese patients. We realized that that was important.
We have salesmen scattered throughout Japan, which gives us an advantage. Our role is to be a partner of overseas medical companies so that we can be the distributor in Japan.
Cardiovascular care is your current primary therapeutic area that will grow to 1.9 billion by 2027 worldwide. You are involved in surgery and rhythm management, and your catheters are used in various applications. How do you expect the market to grow for you not only in Japan but also overseas?
It is true that the cardiovascular field would expand given the globally aging population. We provide products to Japan, Korea and Taiwan, but we want to expand to the US, Latin America, Southeast Asia and other places in the world. With our history in the cardiovascular field, we want to utilize catheters and other devices to expand into new fields such as gastrointestinal and neurovascular. We want to leverage the experience that we have.
A part of your financial year 2023 strategy is to go into new territories like GI and neurovascular. What synergies can you draw upon, especially as both a trader and a manufacturer as you enter these new spaces?
As a distributor, we used to trade coronary stents, but we are no longer doing that. We discontinued that business because it has now become a red ocean. With the low price, there is big cost competition. We want to relocate our human resource sales force into other fields, and our new focus is gastrointestinal and neurovascular fields. For GI, we are developing more endoscopy products in-house, but these are not yet complete or sold in the market. Currently, we are selling a tube stent and have been well received.
Phenox, a company in Europe, was acquired by Wallaby in China. As a dealer for Phenox, we have an agreement to distribute made-in-Europe neurovascular products in Japan. Baylis, a company we had exclusive selling rights for 10 years, was bought out by Boston Scientific. This year, we are losing JPV 4 billion in turnover, so we are trying to prepare ourselves for the next potential growth.
We have acquired a company related to vascular graft from Ube Corporation, which we have grown into one of our pillar businesses using the elephant trunk surgery technique. We are open to new proposals, but it is very hard to find such a case. I think that is because our focus is the domestic market rather than becoming a global overseas marketing company. However, once we become more of an overseas company, then we will have more opportunities to acquire new companies.
As you expand into new therapeutic areas there will be a number of challenges. Most importantly, there will be regulatory approval hurdle like FDA in America, which works as the de facto approval system for the world even though its mandate is US only. What do you think will be the biggest challenge as you expand in these new areas?
Our business includes being a subcontractor to major companies and working according to the quality management standard set by the FDA. Although we do not produce the finished products, we assemble the catheters. We are now trying to acquire an MDSAP certificate, which is an international agreement joined by Japan, the US, Australia, Brazil and Korea. Upon acquiring it, we will not need to receive any audit. Rather, we can directly sell our products in these markets.
We recently sold our Shenzhen factory since we decided discontinue our business on coronary intervention business that lasted for over 15 years. We have our factory in Malaysia because even though we had subcontractors in Kuala Lumpur and the Philippines, we wanted to ensure high-quality products and technologies. Assembling medical devices always requires human hands, so everything cannot be automated.
Malaysia is very good in terms of political and security aspects, as well as fewer typhoons.
Frozenix was specifically designed for the Frozen Elephant Trunk technique, a fairly recent technique that allows the treatment of combined lesions of the thoracic aorta in a one-stage procedure. Before, this took longer because it involved two separate procedures. When it was first launched around 2016, there were a lot of complications as well as a high mortality rate among the very first samples. How does Frozenix improve this technology in comparison to other similar products?
This technology was developed based on the idea that it used to be solely dependent on the skills and expertise of physicians. Surgeries were highly dependent on that craftsmanship. Now, the idea has been changing. Lesser time for surgery means a higher chance of survival. People started to notice that there should not be any discrepancy in the skills of the physicians.
During COVID, physicians were very careful in conducting surgeries, especially considering that if the patient had COVID, it would spread and the hospital would cease operations. Limiting the surgery was important as well as protecting themselves. Frozenix is used for patients in emergencies like aorta dissection. Our products have been really well-received by physicians and patients in terms of minimizing the hours of the surgery. The direction of our company is to always aim to shorten the time of a surgery, which would achieve the desired outcome for the patients and physicians.
Imagine we come back on the very last day of your presidency to interview you all over again. Is there a goal or ambition that you would like to have achieved during your time as president before handing the company over to the next generation of executives?
Japan Lifeline has a vital mission not only in the market but also toward our employees. It is important for the company to survive and be sustainable. We have a unique role that J&J, Boston or Medtronic cannot play. Hence, we have to fulfill our role. Regardless of who the president is, we have a mission that we must carry out.
Interview conducted by Antoine Azoulay & Paul Mannion